UBS’ U.S. wealth management division posted income of CHF $178 million in the fourth quarter of 2009, up 62 percent versus the year ago quarter. Clients continued to withdraw significant assets from the firm both in the U.S. and around the world, however. The wealth management Americas division saw outflows of 12 billion francs, over twice what analysts had been expecting.
Clients have been yanking their money from UBS amid ongoing wrangling between the firm, the Swiss government and the IRS over UBS’ American tax-dodging clients.
There was still a trickle of financial advisor departures in the fourth quarter, with a net loss of 202 advisors bringing total FA headcount down to 7,084. But this is drastically reduced from previous quarters. In the third quarter, UBS’s wealth management Americas division lost over 1,300 financial advisors. The improved retention numbers likely reflect improvements in morale since Bob McCann joined as the CEO of the U.S wealth management unit in October and recent changes to the compensation plan and recruiting bonuses.
On Jan. 22 a Swiss court ruled that the Swiss government must not hand over the details of accounts belonging to U.S. tax dodgers. In a settlement reached last August between the Swiss government and the U.S., the Swiss agreed to hand over the names of 4,450 American clients. The settlement was meant to resolve accusations by the U.S. government that UBS deliberately helped clients evade taxes.